Rental Property Investor · San Francisco, CA · Member since 2020 · 14 posts · 1 vote
Landlord for SFH in Hayward, CA. Tenants have been relatively communicative about their financial hardships during COVID-19 and over the last several months we have worked together to keep them in the home and even reduced rent for several months during the summer.
However, they requested another reduction for the months of January and February which I split the middle and agreed to a reduced rate for January but not February. Additionally, I suggested we explore mutually breaking the lease early to help them find a place that is more economical. I have no intention of evicting them but rather helping them find a place that is more affordable.
The response was them sending me 25% of their monthly rent and a signed Declaration of COVID-19 related financial distress.
After reading through the Housing is Key website it looks like my hands are tied for legal action until February, when the act expires. (barring any extensions)
Ideally, I'd like for the tenants to pay the reduced rent they requested or break the lease to find something more economical, however I realize that is short sided.
Curious, what other courses of action have other landlords taken?
If the tenant is unable or willing to pay rent, are there ways to work with the mortgage company to delay payments?
Investor · San Francisco, CA · Member since 2017 · 303 posts · 327 votes
5y
@Kevin Connelly Hayward has announced a number of small business grants since the start of the pandemic. I don’t recall details. More grants may be in the works. I get my news from the city hall by email - you can sign up for “The Stack” at the bottom of the link below. The link is actually to the latest rental assistance Hayward is offering:
Property Manager / Investor · San Jose, CA · Member since 2013 · 779 posts · 301 votes
5y
@Kevin Connelly You are limited in what you can do at the moment since they paid 25% and returned the COVID form. This does not let them off of their lease obligations, just delays it. You may want to consult an eviction attorney for advice. CA + COVID makes doing evictions tricky. It has to be perfect.
I read through the legislation and unless CA decides to extend the moratorium, it may end by 1/31. However, by the looks of things it will likely be extended. Either way, I have reminded them they are still obligated to pay the full amount.
Rental Property Investor · San Francisco, CA · Member since 2020 · 14 posts · 1 vote
5y
@Ming Wan you make a great point. I do know both of their jobs. The husband worked for Marriott as a line cook, and the wife is a hairstylist. So I’m sure they are both seeing significant pay decreases.
Would asking for statements be beyond my reach?
Can you tell me more about why forbearance could be used against me?
From what I understand, it does not hit your credit summary. Or is it with just this specific mortgage company I may have trouble in the future?
I think you can ask for statements if they meet certain higher income requirements (CA moratorium page has more info). In your case, I can see how the tenant is impacted. Seems like a genuine case unlike mine.
When I saw the forbearance proposals come out in April 2020, it was interesting to me that none of them explicitly said in words that applying for forbearance will not be used against you in the future. A lot of the language instead was very vague. Wells Fargo in particular evolved their language several times. The way I see it is, if I were a lender why would I not use this as input into any further business I do with you?
You may want to search in the forums here or on bogleheads for people who applied and their experiences. (example: https://www.bogleheads.org/for...)
Investor · San Francisco, CA · Member since 2017 · 303 posts · 327 votes
5y
@Kevin Connelly I prefer to provide links to government agencies/direct sources, rather than someone’s interpretation (potential misunderstanding) - unless an attorney - of a given rule/law. I have not had the time/interest to read the Act. Here is some language of possible importance to you from the CFPB site (warning: this blog is written by a CFPB social media person, who is not a lawyer) as you consider whether to ask your lender for forbearance:
“...The CARES Act places special requirements on companies that report your payment information to credit reporting agencies. These requirements apply if you are affected by the coronavirus pandemic and if your lender gives you an accommodation to defer a payment, make partial payments, forbear a delinquency, modify a loan, or other relief.
If your lender does make an agreement or accommodation with you:
How your lenders report your account to credit reporting agencies under the CARES Act depends on whether you are current or already delinquent when this agreement is made. These reporting requirements apply only if you are making any payments required by the agreement.
If your account is current and you make an agreement to make a partial payment, skip a payment, or other accommodation, then the creditor is to report to credit reporting companies that you are current on your loan or account...”
https://www.consumerfinance.gov/about-us/blog/protecting-your-credit-during-coronavirus-pandemic/ (last updated in July)
But here is a consumer lawyer’s take on the issue, and it appears to agree with the above quote from the CFPB blog:
There are other nuances to read about - and not everyone who writes about their own experience on social media may understand their own nuances. Your lender may screw things up, and so can a credit reporting agency. I trust that, as they get more experience working with the CARES Act provisions, fewer issues should arise for consumers. But it appears that the law is there to protect you - if you are current... In my personal opinion: if you should need to get another loan during/soon after forbearance, the new lender is likely to notice the special accommodation one way or another.
[While that is apparently not your case, I hope to one day find out how many people took (unneeded) advantage of this provision, and invested the deferred payments in stocks or Bitcoin.]
Rental Property Investor · San Francisco, CA · Member since 2020 · 14 posts · 1 vote
5y
@Al D. - Incredibly interesting takes on the nuances of the law.
Personally, I don't plan on requesting forbearance.
"[While that is apparently not your case, I hope to one day find out how many people took (unneeded) advantage of this provision, and invested the deferred payments in stocks or Bitcoin.]"
Super interested to see how many investors unnecessarily took advantage.
what if a tenant gave 25% of monthly rent... how does one file the 25% rental income on taxes if on forbearance? do they claim the 25% or do they claim the full rent?
Landlord for SFH in Hayward, CA. Tenants have been relatively communicative about their financial hardships during COVID-19 and over the last several months we have worked together to keep them in the home and even reduced rent for several months during the summer.
However, they requested another reduction for the months of January and February which I split the middle and agreed to a reduced rate for January but not February. Additionally, I suggested we explore mutually breaking the lease early to help them find a place that is more economical. I have no intention of evicting them but rather helping them find a place that is more affordable.
The response was them sending me 25% of their monthly rent and a signed Declaration of COVID-19 related financial distress.
After reading through the Housing is Key website it looks like my hands are tied for legal action until February, when the act expires. (barring any extensions)
Ideally, I'd like for the tenants to pay the reduced rent they requested or break the lease to find something more economical, however I realize that is short sided.
Curious, what other courses of action have other landlords taken?
If the tenant is unable or willing to pay rent, are there ways to work with the mortgage company to delay payments?